Wooing Contractors With Promotions
Lew Miller, president of Iowa Wholesale Supply Co., based in Marshalltown, Iowa, discussed the how-to's of contractor promotions at a special interest group meeting during the 2002 spring meeting of Omni Corporate Services Ltd. (See Lew Miller in action on next page.)
There are some general rules to follow. When possible, turn the promotional offer into a reward by stipulating a purchase requirement. The reward can be tied to purchases of a specific product or category of products. Set a minimum attainable purchase level. Offer a reward to contractors who surpass their purchase level from last year. Extend the offer over a couple of months, if warranted. A vacation trip promotion can run for a year. Carefully track each customer's sales and keep the customer informed of his progress toward achieving the reward. Make it clear that the customer not only has to make the purchases, but also has to pay his bills on time to qualify for the benefits. Also consider setting parameters on how much the contractor can earn.
"Figure 1% of sales as your promotion budget for the year," Miller says. "Make that your kitty. Then team up with your manufacturers to get part of that back in co-op funds. It's amazing how many people don't use co-op money.
"It doesn't hurt to ask," he continues. Even if the cooperative budget is running low, if you tell manufacturers you're doing a trip promotion, hosting a counter day or need funds for the Yellow Pages, they may give you free product or find extra credit, he says.
Once you have set aside the money, here are some creative ways to spend it:
Promotional opportunities also are available on the Internet, Miller says. Half of the wholesalers at his workshop said they either had a Web site or were working on one.
"You have to have the right host, the right server and the right search engine," Miller says. "We do a substantial amount of mail order business over the Internet. You don't have to be the low-ball price.
"We do a lot of business on E-bay," he continues. "We'll post up to a dozen items on E-bay and maybe three or four will sell. People will call with questions and we'll send them literature."
Faucets, sinks, shower rods, smokers and grills can sell well on the Internet, he says.
Trucks can also be a promotional tool. "You can use co-op money from your suppliers to get logos or a mural painted on your trucks," Miller says.
"Keep telling your customers about what you are doing," he says. Iowa Wholesale sends out promotional flyers paid for with cooperative dollars.
"Do something nobody expects you to do," Miller says. "What is your competition not doing? Meet or exceed your customers' expectations within reason. Today a wholesaler has to think like a retailer."